CARES Act Offers Businesses Financial Assistance

May 25, 2020

On March 27, 2020, Congress passed, and the President signed the Coronavirus Aid, Relief and Economic Security Act of 2020 (“CARES Act”). The CARES Act is the third phase of the Congressional relief bills aimed at providing economic aid to those impacted by the COVID-19 pandemic and the associated economic decline. The CARES Act establishes new economic programs for businesses, builds upon programs implemented in Congress’ Phase II relief bill – the Families First Coronavirus Response Act (“FFCRA”), and provides tax relief and other benefits for businesses.

We have a series of articles that offer a look at certain financial assistance available to businesses under the CARES Act:

Congress passed the Paycheck Protection Program and Health Care Enhancement Act with an additional $480 billion for Small Business Administration (SBA) programs and health care providers on April 23, 2020.

The CARES Act establishes a new Paycheck Protection Program under the Small Business Administration’s Section 7(a) loan program designed to help eligible businesses stay open and retain employees by providing loans to pay operational costs during the COVID-19 emergency. These loans are forgivable if the borrower complied with certain conditions on how the funds are spent. This program is different from the existing SBA loans and the SBA Economic Injury Disaster Loan (“EIDL”) under Section 7(b) of the SBA Act established under the FFCRA.

PPP loans are available on a “first come, first served” basis and each eligible borrower can apply for only one loan. A summary for eligible borrowers on how to apply for a PPP loan based upon the SBA’s interim final rule.

Since the passage of the CARES Act and the initial Interim Final Rule issued by the Small Business Administration, additional guidance has resulted in confusion for many applicants. Here are answers to seven commonly asked questions about the PPP.

The Small Business Administration (SBA) released the much-anticipated Paycheck Protection Program (PPP) loan forgiveness application and we have a look at the most interesting elements from the application and its instructions.

On April 9, 2020, the Federal Reserve Board announced a number of actions it had taken to provide up to $2.3 trillion in loans to support the economy, including implementing Main Street Lending programs.

The CARES Act expanded a number of additional programs to offer financial support for businesses during the pandemic, including SBA Express Loans, Economic Injury Disaster Loans, emergency grants and subsidies.

The CARES Act authorized $30 billion to go directly to education to ease the financial impact caused by COVID-19, roughly $14 billion of which will go directly to higher education institutions and their students.

The CARES Act authorized $100 billion for healthcare provider relief related to COVID-19 losses, with an immediate infusion of $30 billion authorized by the Department of Health and Human Services on April 9.

Section 3719 of the CARES Act allows healthcare providers to receive advanced payments from the Medicare Program under the Centers for Medicare & Medicaid Services Accelerated and Advance Payment Program.

The CARES Act included an appropriation of $100 billion into the Public Health and Social Services Emergency Fund for relief funding for healthcare providers, and the Paycheck Protection Program and Healthcare Enhancement Act passed on April 23rd included an additional $75 billion to this Emergency Fund.

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